Skip to main content
Case Details
main case
Case
New

Internet Finance: Internet or Finance? The Transformation from Lufax.com to Lu.com

per copy

This case describes how Lufax, a corporate spin-off from its parent company---Ping An Group China, started its peer-to-peer lending business model in China and grew into a comprehensive asset management platform and hence a rather independent corporation on its own. The case documents the story behind the founding of Lufax and its milestone events. In particular, this case focuses on the internal tension between two competing business logics: “Internet logic” that values fast user growth and formalizes procedures later vs. “Finance logic” which emphasizes risk control and manageable growth. Such tension is exemplar among many Fintech companies in China, a developing country that experiences explosive growth in novel financial services and poor regulatory environment simultaneously. The instructor can use this case to illustrate key topics in strategy and corporate entrepreneurship such as how incumbent firms encourage innovation from within via spin-offs. The instructor can also adopt this case to examine the unique competition landscape in China Fintech and compare it to other Fintech cases such as P2P lending in US (e.g. Lending Club) or in UK (e.g. Zoppa).

Learning Objective:

After reading and analyzing the case, students will be able to:
 

  • Identify the unique business opportunities presented by the existing financial services available in China and its unique regulatory environment

  • Understand how Lufax carried out peer-to-peer lending service in China and the key dimensions that its service differs from those of other P2P companies in China

  • Summarize and compare the two competing business logics: Internet logic vs. Finance logic, particularly relating the two concepts to real-world business practices

  • Identify key factors that influence firm decision-making and competitive dynamics

  • Relate the Lufax case to P2P lending or even broader Fintech company companies worldwide and compare their differences from regulatory environment, market structure and firm decisions

  • Develop nuanced understanding of the uncertainties and challenges facing corporate spin-offs

  • Integrate conceptual knowledge of corporate decision making, organizational culture with practical applications such as strategy formulation and product development

Year of Publication: 2018
Ref. No.: 18/611C
Discipline: Strategy & General Management
Industry: Consumer Finance
Country: China (People's Rep. of)
Company: Internet Finance: Internet or Finance? The Transformation from Lufax.com to Lu.com
Languages: English
Pages of Text: 17